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Chinese regulators have reportedly cleared a plan by billionaire Jack Ma’s Ant Group Co. to raise 10.5 billion yuan ($1.5 billion) for its consumer unit.
The China Banking and Insurance Regulatory Commission division approved the company’s plan to raise its capital to 18.5 billion yuan, reported Bloomberg, citing a notice dated Dec. 30.
Following the deal, Ant, which contributed 5.25 billion yuan, will control half of its shares while a unit owned by the city of Hangzhou will hold 10%, the report said.
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Other new investors include Sunny Optical Technology Group Co. and Jiangsu Yuyue Medical Equipment & Supply Co. Shares of Ma-founded Alibaba Group Holding Ltd BABA rose over 7.5% in Hong Kong on Wednesday.
The consumer finance unit combines Ant’s most profitable online lending operations, Huabei and Jiebei, the report said.
Expert Take: Leon Qi, an analyst with Daiwa Capital Markets Hong Kong Ltd., wrote in a report, “We view it as a signal on Ant’s regulatory rectification wrap-up.” The consumer unit will be able to handle 1.1 trillion yuan of loans once the fundraising is complete, Qi said.
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Image and article originally from www.benzinga.com. Read the original article here.